Author: admin

Overdraft

How to Take Care of Your Overdraft

Having an overdraft can be a really useful thing. If you run out of money before getting paid it means that you will be able to borrow some and keep you going without having to organise a loan. However, an overdraft can also be a very expensive way to borrow money and so it is really important to make sure that you use it wisely.
Firstly it is really wise to know exactly how much of an overdraft you are entitled to. This is called your authorised overdraft. If you draw more than this you will be taking out an unauthorised overdraft and this can get you into trouble. This is because you will end up paying a lot more money. An unauthorised overdraft is much more expensive. It is good to check the costs of both types with your bank so that you know exactly how much you will be paying. An authorised overdraft can be pretty expensive but an unauthorised one can potentially be dearer than any other type of borrowing.

Therefore you need to be very careful. You need to make sure that you are always aware of how much money you have in your account and how much you are entitled to borrow. Obviously you want to borrow as little as possible for as short a time as possible. This means that if you have money elsewhere then it will much better if you use that before you go overdrawn. You should also think very carefully about what you are buying and whether it is really necessary.

Another thing to consider is how you will repay the overdraft. Once you put money into your account then you will pay off the overdraft and you may feel that this is a great solution. However, you have to then manage until you next get some income on less money. This can lead to a spiral of borrowing as by the end of the month you may again be short of money and borrow again. You could find that you need to start using your overdraft closer and closer to the start of the month and may even get to a stage where you cannot even pay it all off when you get paid. This may seem a bit over the top, but the fees and interest add up really quickly so it can be surprising how much you will owe in a short space of time. Therefore you need to think hard about making sure that you budget well during the month when you have made a repayment so that you do not need to borrow again.

As it is so dear it is wise to make sure that you only use an overdraft in an emergency. This means that you need to be able to carefully budget in the month and make sure that you have enough money to last you until you next get paid. This is not easy if you are not in the habit of doing so. To start with you need to take note of all of the money that you have to pay out each month, things like rent, bills, interest payments etc that have to be paid. You will also need to pay for food, transport and other things. It is worth making sure that you have enough money for all of those things before you spend money on things that are not necessary. It can be best to set up your bill payments by direct debit, if you can, for the same day of the month, preferably just after you get paid. Then you will know how much is left to spend on other things so that you can more easily budget.

Hopefully by carefully budgeting, being aware of how much money you have and spending wisely and making sure you have enough money to repay an overdraft if you use one, you will be able to carefully manage it. If you are aware of how much it costs, you should feel less inclined to use it and therefore be more motivated to manage your money. It can take a lot of will power and even life style changes to be able to do this, but it can be really worth it if you are much more in control of your money.

Mortgages

How to Choose the Best Mortgage Lender

If you are looking to take out a first time mortgage or to change your mortgage company then you will find that there is a huge choice of places to choose from. This can make things really confusing as you will not know which of the lenders will be best for you.

Some people will choose to pay a financial advisor. They will know about what is available and what types of mortgage will suit you in your current circumstances. They will do all of the research for you and you will not need to worry about doing anything like that yourself. This can be worth the money if they can find you a great deal which you would not have otherwise spotted.

Some people may prefer to use a specific lender. It may be someone they have used before or just that they trust for some reason. Even if you do this, you will still need to look at the different mortgages they have on offer, as there will be a choice. It is also worth checking what all the costs are as well as the interest and just comparing with a few others to decide whether it really is as good a deal as you think.

Many people choose to research for themselves. With online comparison websites and brokers, this can be fairly straightforward. However, you will need to spend a lot of time researching still. A broker, can be useful, but unlike a financial advisor they are free, but they will not look at every possible option for you. They will usually just pick the best deal from a selection of lenders in the same way as a comparison website will. This will mean that they are only selecting from a small slice of the market and although they will find you the cheapest deal from that selection it does not mean that there will not be cheaper ones available elsewhere. You could of course use a selection of brokers or a selection of comparison websites and that could give you more of a range. However, you may find that they are still very similar and there are some lenders that are not on comparison websites.

This means that you may have to do a lot of work. Not only will you need to learn all about the different types of mortgages, if you do not already, you will also have to find out which lenders offer what so that you can compare them. This will take a lot of work and you will probably end up just looking at companies you are familiar with and ones that are on comparison sites. You may feel more inclined to go with a lender that you have heard of anyway, so this may not matter too much.

You will need to consider, however you choose to research the mortgages available, what is important to you when comparing them. It may be that the cost is important; it certainly should be, but there may be other factors as well. As mentioned earlier you may want to go for a lender that you know, you may also like one that you feel would be flexible with good customer service, perhaps one that has branches in your local town or there may be other things that are important to you as well.

It can be relatively easy to compare the cost, you can see the interest rates and ask which the fees will be and then just do the maths. However, comparing things like customer service can be more difficult. You can telephone them, email them or talk to a staff member in a branch to help you make up your mind. However, you may like to also look at online reviews and talk to friends and family about their experiences as well. It is worth remembering though that everyone has different requirements so a lender may be perfect for one person but not suitable for another. Therefore if you see a poor review or hear something bad about a lender, make sure that you still decide whether they definitely would not be suitable for you or whether that persons circumstance would not be relevant to you.

Credit Cards

How to Repay Your Credit Card

If you have significant credit card debt then you will know how difficult it can seem to pay it off. It is very easy to accumulate a large debt, perhaps on multiple cards and not even realise that it is building up until it gets out of hand. As you can set up your credit card so that only a small minimum payment, usually just the interest, is paid each month, then the debt can build up very quickly.

Once you discover this debt or even if you knew that it was accumulating, you may feel that it will be almost impossible to get rid of it. However, it is possible, but you will have to be committed. The first step to take is to stop spending money on the card. This can be really difficult, particularly if you use it regularly. However, before you can start to pay back what you owe, you will need to stop increasing the debt.

To stop spending on the card, you will need to think about what things you buy and how you will manage without it. Consider what you use it for and how you will be able to cope without using it. It could be that you use it to manage at the end of the month when your money runs out, that you use it to buy things that you would not otherwise be able to afford. You will need to probably consider going without things and this could be difficult. You will need to prioritise your spending and make sure that you only buy things that are necessary so that you can manage without the credit card.

This means that you need to consider what items you buy are essential and which are not. You will need to make sure that you pay your rent or mortgage, your utility bills, any transport costs associated with your work and food. You will need to pay your taxes, interest payments on loans and any contracts you have such as mobile phone, tv and broadband. You may also need to pay television licence, subscriptions and memberships, insurances and upkeep costs of your home and vehicle. That is a lot to have to pay for, but hopefully it will be something that you can manage with your income. If not you may have to consider cancelling subscriptions and memberships, perhaps moving to a cheaper home, getting rid of your vehicle and cutting your food bill.

It will be important to keep cutting your spending as much as possible because you will need to put all of the available money that you can towards paying off your debt. The more that you can do this; the quicker you can pay it off. With a credit card, you are able to pay money off it at any time. This means that you will not have to change how much you pay off each month, unless you want to but you can just pay off chunks of it at any time. If you have any savings, you could use that to start with as you will pay very much more in interest payments on the credit card than you will gain on interest on the money in the bank.

It could also be wise to see if you can find ways to make more money. This will help you to be able to pay it off more quickly or be able to purchase things at the same time as paying it back. You could consider getting a second job, working overtime, asking for a pay rise, doing some freelance work, selling things or starting your own business. There are many possibilities but you will need to make sure that you pick one that fits around your current employment and that your employer will allow.
This may seem like a lot of hard work and there is no pretending that it will not be. It will take a lot of will power to change the way that you spend and to earn more money but it can be a very worthwhile habit to get into. Once the debt is clear, you can start saving and then you may be able to pay off other debts, save up for a deposit on a home or spend the money on something really worthwhile.